Skyrocketing inputs put the squeeze on processing tomatoes

The processing tomato hauling trucks were barely dry from cleaning after the 2007 crop when California processing tomato growers won a hefty $70 per ton contract for this season’s crop.

Growers were all smiles until input costs went ballistic and California became ensnarled in a political, judicial and natural drought.

It has become so depressing that some growers are wondering if they will grow any tomatoes in 2009 at any price.

Fertilizer costs, in particular, have skyrocketed this season. Bill Gilardi and his brothers, Leo Gilardi and John Gilardi, grow tomatoes, cotton, alfalfa and corn in the Dos Palos and Los Banos areas of California’s San Joaquin Valley.

“That $70 contract price looked pretty good in January,” Gilardi says. “It’s not looking that rosy now. Our fertilizer costs have increased over 50 percent from what they were last year.

“Last year we were paying $495 for 11-50-20. It’s $1,200 now. Fuel prices have gone sky high. The good news, at least in the Dos Palos area, is that we’ve had 100 percent of our water allocation this year, but even that could be a different story next season.”

According to Chris White, general manager for Central California Irrigation District (CCID) in Los Banos, the district is fortunate to have an ample water supply and secure contracts. However, the ongoing drought could start straining that resource.

“We have 100 percent supply this year, but we’re not sure what we’ll have next year,” White says. “Our water availability is based on the inflow into Shasta.”

CCID’s water rights are some of the oldest in the state — a legacy of SJV farming and water pioneers Miller & Lux. Even though CCID’s water customers are in a much better position than many other agricultural water users around the state, White says it’s still proactive conservation practices by growers that are critical to preserving the resource.

“Our customers put water to good use, and we strongly encourage that,” he says.

Unlike some other water districts, CCID growers do not sell water outside its boundaries.

Even though water is not quite as critical for growers in the Dos Palos area, fuel and fertilizer are still problematic. “When you look at the cost of inputs that are required for tomatoes, other crops such as wheat, corn and safflower start looking a whole lot more attractive,” Gilardi says. “The good news is that we now have a choice.”

On the plus-side for tomatoes, it’s been a relatively good year with little pest or disease pressure. “The vines are holding moisture,” Gilardi says. Harvest for him began in late August. “We don’t have any late tomatoes, so harvest should go fairly quickly. We do have split sets due to the frost early in the season, and wind was also a problem early in the year.

There were some sporadic problems with virus and disease in the Los Banos/Dos Palos area, but it appears to be much lighter than in other tomato growing areas.

“We’ve had spotted wilt virus show up in some fields and black mold is here and there,” says Mark Vierra, PCA with Helena Chemical Co., Merced, Calif. “However, it hasn’t been that bad and we didn’t have any extreme heat for the most part. Overall, the weather has been relatively mild. By the first of August there were only about five days over 100 degrees.”

“I think yields will be about average for us,” Gilardi says.

That doesn’t appear to be the case for all areas, according to the California Tomato Growers Association (CTGA) in Sacramento, Calif. Statewide, processing tomato yields are forecast to fall short of contracted volumes. Processors are reportedly eyeing the Salinas Valley for 2009 acreage.

What the current situation portends for next year is still unknown. Outgoing CTGA President Ross Siragusa admits $70 per ton is no longer attractive, and growers are considering alternatives to tomatoes for next year.

“We’ll put a pencil to it this fall and figure out what we’re going to do,” Gilardi says. “Cotton will probably be the first to get the ax.”

The Gilardi brothers grow Pima and Acala. Tomatoes could very well get the ax next.

“Ask me in January and I’ll have an answer,” Gilardi says. “I can tell you right now that corn is easier and there’s a lot less financial risk involved.”